Commerce Bank now has asked me twice to sign up for my "new Pre-Approved Commerce Bank Rewards Visa credit card." The rewards? One point per dollar in purchases and "3x points for every dollar in interest accrued on your monthly balances."

ilskeptic wrote:Commerce Bank now has asked me twice to sign up for my "new Pre-Approved Commerce Bank Rewards Visa credit card." The rewards? One point per dollar in purchases and "3x points for every dollar in interest accrued on your monthly balances."

Wow, talk about perverse incentives.

I have seen this on other cards as well; around 1998, First USA created a rewards plan which gave points for your purchases but more points if you carried a balance.

Worst? No. Between this card and a run of the mill 1% rewards card, if you don't incur any interest, you are even. Like it or not, some people do incur interest. For them, this card is better, if the interest rate is the same on two cards. Therefore you are at least as well off with this card as a run of the mill 1% rewards card. I'm sure there are cards with lower rewards than 1%. Some cards don't have any rewards at all.

tadamsmar wrote:At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"

This old myth. If they thought that, they'd get rid of people who didn't carry a balance instead of fighting over them.

Brian

Someone who worked at a credit card company told me that they used that term in the office. I agree that it's more of joke than something the companies would take seriously, I assume they make some money of of the non-interest-payers since they get a merchant fee.

sscritic wrote:I don't have cards that pay points; I only get cards that pay dollars.

I used to do the same, but points/miles from cards we signed up for in the last year, plus an additional $300-400 in fees, have paid for airline tickets for 4 domestic round trips and 2 round trip tickets to Europe. These tickets would have cost us probably close to $4000 and we still have over 100,000 points/miles remaining. Required spending to collect all these points/miles was about $7000.

So far it does not look like I'll be keeping any of the points/miles cards, so I also may soon not have them, but I will be happy to get more of them in future.

tadamsmar wrote:At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"

This old myth. If they thought that, they'd get rid of people who didn't carry a balance instead of fighting over them.

Brian

Someone who worked at a credit card company told me that they used that term in the office. I agree that it's more of joke than something the companies would take seriously, I assume they make some money of of the non-interest-payers since they get a merchant fee.

The merchant fees they collect with almost no risk far outweigh the risky interest from the balance-carriers.